Blockbuster Launches Movie Rental Box

We’d heard Blockbuster was launching a set-top box prior to the holidays, and here we are. The Blockbuster OnDemand service is powered by 2Wire’s new MediaPoint hardware. The box is “free” … should you choose to pre-pay for 25 Internet-delivered movies at a cost of $99. Additional rentals will start at $1.99 and Blockbuster promises many titles within 30 days of DVD release. Unlike Netflix’s strategy to provide subscribers with unlimited viewing and enable a variety of partner hardware, Blockbuster has started out on a sole platform with the more traditional pay-per-play model. Which isn’t neccessarily a bad thing if you’re looking for current Hollywood hits… something in short supply on Netflix’s Watch Instantly service. The Blockbuster OnDemand box kindly incorporates wireless connectivity, but video is described as only “DVD quality”. So, those in need of higher definition content will want to look elsewhere. While the Internet video streaming space is crowding, however it’s too early to count Blockbuster out as they’ll leverage their targeted retail channel to move units.

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13 responses to Blockbuster Launches Movie Rental Box

Interesting that Blockbuster is doing this. I actually think they’ll sell some of these boxes, but I’ll repeat what I say about Roku and the other single-focus boxes: “no more boxes” PLEASE integrate the UI and streaming functionality into existing boxes that would work perfectly fine.

Put this in Xbox360, PS3, Media Center Extenders, SageTV Extender etc. etc. and I would use it. Sell me a box that doesn’t do much else and I won’t. Don’t have the room or the desire to purchase yet another box.

On another note, why would they pick the name 2Wire? Doesn’t that seem sort of contrary to the wireless functionality the box has???

2Wire got their start making DSL modems. I had one or two early in the decade when Comcast didn’t know how to provide reliable Internet and I used Verizon DSL. The box also offers a wired connection, but I emphasized the wireless capabilities because it’s important to many (including me).

Expanding on Brent’s comment, I think we’ll see this stuff start to get out of the boxes and into the TVs. Sony’s Bravia is adding partners at a good clip to add web functionality. They can build the UI and keep some control over where we can go with it. Seems like a no brainer.

JG, Does Sony really count? The Bravia TV requires the Bravia Internet Video box… Trueit attaches to the TV, but it’s another ($300) box. And, unfortunately, HP is no longer going to produce their line of Internet-connected Media Smart televisions. I’d rather see fewer boxes as well. But not if it slows down innovation. Getting Netflix on both my Xbox and TiVo units is pretty cool. Unless the Roku box adds something (like Hulu) soon, I’ll ebay it. What Netflix Roku and Blockbuster have in their favor is that their boxes are small and the price is low – with some name recognition. They’ll do better than that VuNow box, for sure.

@ Brent … just to put a finer point on Dave’s reply. They did not pick the name 2Wire for the product … 2Wire is the company who partnered with Blockbuster to bring this “MediaPoint Digital Media Player” to market. I think your reaction to the name, however, is insightful to how others may also react. Maybe branding the box with 2Wire’s was a bad decision. Many consumers are not familiar with them and may miss the [brand] significance.

Regarding the approach to getting bundled devices to the marketplace and offering a compelling consumer offering:

I like Netflix’s approach better. Although the Roku was a dedicated device, Netflix is willing to publish their service API which has allowed multi-purpose devices to enter the marketplace: LG’s BD300 blu-ray player, Samsung’s BD-P2500 blu-ray player, Microsoft XBox 360 game console have all come out in the past months. The open API will allow many other companies bring bundled product to market — including network enabled flat screen TVs very soon.

To me it seems like a line is being drawn and the marketplace will determine a winner:

** Netflix is taking an approach of open APIs, multiple [sometimes bundled] devices, and FREE streaming. However, they are passing the cost of the device directly to the consumer in hopes they are “buying one anyway” and will choose the Netflix enabled version.

** Blockbuster is taking the closed “system” approach, single purpose device, subsidizing the cost of the device, CHARGING for the streamed movies and purportedly offering more “first run” choices of content.

KevinH, thanks for clarifying the 2Wire point I failed to make. Regarding Netflix, the API isn’t published for all – they’re working deals. Not sure if money changes hands, but it’s not open for just anyway. Having said that, CEO Reed Hastings says he wants the service on tons of boxes. Regarding Blockbuster – do we know for sure they’re locked into a single device? Since Xbox is the exclusive gaming console for Netflix, maybe Blockbuster can work a deal with Nintendo. At the end of the day, though, most of these services are still competing with cable company VOD. If I stick CableCARD into a tru2way TV (assuming a nationwide rollout and many television choices), I’d also get movies on demand with no extra box… 2009 (and probably 2010) will be interesting indeed.

You are correct, Netflix’s API is not generally available to the public/private sector. A deal must be signed and this is REALLY a business decision (verses a technical one). You are further correct, that we don’t know Blockbuster’s future plans beyond this subsidized 2Wire box. I, for sure, am speculating based on what I’m seeing today.

What is interesting to me is the underlying business models behind the two companies approaches and what this will mean in the consumer marketplace. If we just go by what has been done so far it seems like Blockbuster is differentiating itself from Netflix in terms of devices, content windows, and content prices.

IMHO, Netflix’s pricing keeps it from competing directly with cable VOD becasue they are offering 10k-12k movie titles for FREE (if you’re an existing customer). I’m not aware of any cable companies that are doing the same (other than made for HBO / Showtime stuff), are you?

I know that BB hasn’t made a lot of smart decisions in the past, but this is pretty lame even if it’s only a trial.

When I read the rumors initially, I thought the best thing for them would’ve been to partner up with someone like VUDU which actually has a great movie catalog (not so much on TV side) and two-tiers of HD. Who knows how’d set up the business model (subsidies, profit-split, etc.) but it’d be way less embarrassing than this.

KevinH, another point… with Netflix’s back catalog, the service is often more akin to OnDemand (free) and basic cable+DVR. Though the Starz relationship has shored up their catalog. Interesting, Hastings has said there would be no higher tier or individual rentals… Given the licensing realities ($), I wonder if he’ll have to go down that path to get top, current flicks. But my cable point is that PPV/VOD, while incurring a per title cost, is embedded into millions of homes with no additional hardware fees. (Box rental has a fee, but it’s already being paid.) It’s the same playing field that has limited TiVo to only a small (relatively) number of homes.

Netflix needs to get the word out and explain how they’re different, presumably better. Brent actually forwarded an email he got yesterday doing just that. Though I don’t think Netflix did a good enough job making the point. Hopefully TiVo and Xbox will help them. And I have a feeling they both are incentivized to bring on new customers…

Mark, subtitles on Internet video are few and far between. Some of the foreign flicks include them, but most current content on most service has nothing. In fact, I can’t think of any that provide them. Though I feel like there is *one*… can’t pull that memory at the moment, though.

I have a convenience store with gas. It is in Rutledge GA 30663 and within 10-15 miles are there is no Movie rental box or stores. I would like to appreciate if you give me some details how I can get and set up a Movie rental box in or out of my store.
Thanks
James Francis
tel.706-557-0763
email:dnpcom@aol.com